Debt in a Time of Poor Growth

Literature prevalent in the current academic debate on the economic crisis about sovereign debt and the try to resolve the problem i dentified in high public debt of countries “with risk of insolvency” the primary cause of economics problem (C.M. Reinhart, K.S. Rogoff, 2010). This is despite international econom ists have reached a broad consensus in identifying other causes, due in particular to the limits of the European monetary architecture and especially the absence of a maneuv er on the exchange rate. However, the assumption that the excessive public debt generates effects of the crisis has been accepted as the backbone to justify the choices of austerity , especially in the EMU. Now, confronted with the fact that the critical thr eshold of 90% of the debt/GDP ratio, so close to the levels of many Western countries involved in the crisis and the austerity policies, it does not seem to have any particular economic or statistical significance (T. Herndon, M. Ash e R. Pollin, 2013) this paper wants to investigate, rather, the direct effect of higher indebtedness on economic growth for countries in the EMU with a panel estimation, VAR analysis and Granger causality